logo

HI6026 - Aspects and Methods of Auditing - Assignment

   

Added on  2020-03-01

9 Pages2047 Words65 Views
By student name ProfessorUniversityDate: 22 August 2017.

1ContentsQuestion no 1..............................................................................2Question no 2..............................................................................6Question no 3..............................................................................7Refrences....................................................................................81 | P a g e

2Question no 1With the increased regulations and compliance requirements, audit has been an inevitable partof company’s post facto check of the accounting. There are various aspects and methods of auditing.The books of accounts cannot be taken into consideration and cannot be assumed to give reasonableassurance unless it has been checked and the auditor has stated opinion on the same. With theincreased compliance requirements mandated by ACCA and IFRS, audit is no longer assumed to be theactivity only concerned with checking of the books of accounts in search of frauds and errors or toexpress an opinion on it. It also asks whether the reporting has been done in the prescribed format,whether the internal controls in the company are adequate, whether the independence of directors isexisting, whether the company is aware and complaint of its corporate social responsibility.Along withwhether the accounts prepared are relevant to the internal and external stakeholders like creditors,loan financing companies, shareholders, customers, government, etc. Audit also focuses to bring aboutthe changes in the procedures and processes being followed currently by the company, an example ofwhich is the use of estimates in taking the provisions, etc[ CITATION Kne16 \l 1033 ]. Auditors generallyfocuses on two crucial audit procedures starting with substantive audit procedures, which includechecking of all the incomes and expenditures, recorded in the books with the relevant supporting andevidences such that wrong recording or false recording to misstate the financial statements can beavoided and brought to the notice of the management. This also has a bearing on the controlperspective as the flow of the activities should be from department to department and person to personand not all the critical tasks can be given to a single person like invoicing and collection, etc., as itincreases the risk of frauds[ CITATION Gre17 \l 1033 ]. When the substantive audit procedures are not enough to express an opinion, the auditor has togo for analytical procedures which includes trend analysis over the past period using the ratio analysis,budgetary analysis and forecasting, variance analysis and several other audit techniques which helpthem to determine whether further audit procedures need to applied or not. The main factor here ishow good the internal financial control being established in the entity, in case the same is strong, less ofaudit procedures would be required, however, in case it is weak, it reflects more of the risks and moreaudit procedures needs to be applied. Besides all this, the auditor also has to comment upon themateriality level considered, whether the entity has been consistent in its approach and whether or not,it is a going concern. It needs to highlight the risk areas to the management and get a proper2 | P a g e

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
HI6026 - Audit, Assurance and Compliance | Report
|12
|2249
|88

Auditing assurance and compliance - HI6026
|8
|1161
|38

LUBS3550 - Introduction To Audit | Assignment
|10
|2392
|109

HI6026 - Audit, Assurance and Compliance
|9
|2190
|47

Financial Statements of Organization
|17
|3672
|32

HI6026, Audit, Assurance and Compliance | Assignment
|10
|2255
|40